Changing Your FSA Election During the Coronavirus Crisis

Recently, there have been many changes happening in the benefits industry to help provide relief for Americans impacted by COVID-19. Under IRS Notice 2020-29, employers can allow for mid-year changes to 2020 Health FSAs and Dependent Care FSAs. If your employer adopts this provision, you can change your FSA election mid-year – without waiting until the next plan year. Here are three things you need to know.

1.  Changes to Your Health FSA Election

Participants enrolled in a Health FSA can make the following changes to their account:

• Revoke an election
• Make a new election  (if you did not previously enroll, you can enroll mid-year without experiencing a life event such as marriage or the birth of a child).
• Decrease or increase an existing election

The minimum new election amount for the Health FSA would be the greater of the claims paid year-to-date or the salary reduction contributions year-to-date. For participants who have spent more in their Health FSA than they have contributed, salary reductions would continue through the end of the plan year to fund the negative balance.

The IRS also lifted restrictions on OTC medications for FSA account holders under the new CARES Act. FSA participants can use their account to purchase OTC medications without the previously required prescription or Letter of Medical Necessity Form.

2.  Changes to Your Dependent Care FSA Election

Participants enrolled in a Dependent Care FSA can make the following changes to their account:

• Make a new election  (if you did not previously enroll, you can enroll mid-year without experiencing a life event such as marriage or the birth of a child)
• Decrease or increase an existing election

3.  Submitting Your Request: Next Steps

If you decide to change your FSA election, please contact your HR/Benefits Department with your request.  Your HR/Benefits Department will work with P&A Group to process the changes to your account.

Important reminder: this provision is optional and must be adapted by your employer before you can make changes to your account.